Robeco: Yields bounce in a dovish environment

After a substantial downside correction in the past months, expectations for central bank rates have recently started to bounce. Experts from Robeco are thinking this process has somewhat further to go, especially in the US.

24.04.2019 | 09:30 Uhr

After a substantial downside correction in
the past months, expectations for central bank rates have recently started to bounce. We think this process has somewhat further to go,especially in
the US, as economic conditions in China,the US and even Europe are showing signs of recovery
after a series of negative surprises.

Consequently, we see scope for an additional15-20bp uplift in 10yr UST yields in the nea r term, and somewhat less in the Eurozone and Japan;Chinese government bond
yields are already Ieading the
way.

The potential for a stronger repricing of developed
market yields is probably capped bythe de facto easing bias recently
adopted by the major central
banks, which seem determined to avoid a recession.

Yield curves
are expected to steepen in the current environment,with the exception of
the ultra-lang end.